To Help Airports, Cut Federal Spending, Bureaucracy, and Rules

Brian McNicoll
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Posted: Jan 10, 2017 10:28 AM
To Help Airports, Cut Federal Spending, Bureaucracy, and Rules

It’s a risky proposition this notion of President-elect Trump spending valuable early-term momentum on a big infrastructure program.

They’re costly, prone to waste, temporary in terms of job creation and take awhile to deliver benefits.

But in one of the needier sectors of infrastructure, the answer might be for the government to spend much less.

America’s airports are in bad shape. None rank in the top 25 in the world. Many of the busiest, such as O’Hara in Chicago and Liberty in Newark, N.J., are among the worst. President-elect Trump has called LaGuardia, his home airport in New York, “a third-world dump.”

When Rep. Bill Shuster, R-Pa., chairman of the House Transportation and Infrastructure Committee, takes up legislation to improve America’s roads, bridges and airports, he should take the advice of members such as Rep. Thomas Massie, R-Ky., and privatize everything.

Private air-traffic control as Canada and much of Europe has. Privatize airports. Allow private ownership of the facilities themselves as others have done all over the world. End the Airport Improvement Program, in which taxpayers send money to Washington to dole out to local airports, and let airports raise their own money for their own improvements.

Improve Open Skies, the program by which the U.S. makes deals with foreign carriers to compete in each other’s markets. Big domestic airlines have been helped along to dominance by government intervention long enough. Improve competition among airlines, airports and air-related services.

What do we have to lose? Our air infrastructure clearly is run by the people who brought us Amtrak. The American Society of Civil Engineers gives our aviation infrastructure a grade of D. Policies and innovations that would improve air travel are ignored in the current government-dominated climate.

“Given little economic incentive and saddled with institutional and political constraints, major airports and the air traffic control system have not exhibited any marked improvement in their performance for decades despite repeated assurances that they would do so,” wrote scholars Steven Morrison and Clifford Winston for the left-leaning Brookings Institution.

Besides, it’s working everywhere it’s been tried.

According to a study by Airports Council International, in 2010, about a quarter of the airports in the 28 European Union countries were mostly or fully privately owned and run. Today, 47 percent are, and those airports carry 75 percent of the traffic in Europe.

The main airports in Antwerp, Budapest, Edinburg, Glasgow, Lisbon, Liverpool, Ljubljana, London and Zagrebg all are fully private, and those in Birmingham, Brussels, Copenhagen, Florence, Naples, Rome, Venice, Vienna, Zurich and other cities are “mostly private.”

In addition, Australia has privatized more than a dozen airports, New Zealand privatized two of its top three, and even Mexico has privatized some airports.

The Organization for Economic Cooperation and Development found “overwhelming support for the notion that privatization brings about a significant increase in the profitability, real output and efficiency of privatized companies.” A study in the Journal of Economic Literature said privatization “appears to improve performance measured in many different ways, in many different countries.”

Meanwhile, we’re stuck with a top-down, command-and-control system that reduces innovation, wastes money and drives up costs for passengers at America’s 3,300 airports.

Funded by federal taxes on commercial airline passengers and a number of aviation activities, the Airport Improvement Program provides $3.3 billion per year in federal grants for improvements at public airports. Those improvements generally are limited to runways and taxiways and are strictly regulated.

But even with the emphasis on expanding runways and taxiways, America’s planes continue to run late. The Federal Aviation Administration says we lost $22 billion to airport congestion and delays in 2012 and will lose $34 billion by 2020 unless problems are addressed.

Moreover, the bulk of the funds go where they will help least. The 60 largest airports, which serve nearly 90 percent of the almost 900 million passengers in the U.S. each year, receive just 27 percent of the Airport Improvement Program grants. Non-commercial airports, which serve just 1 percent of passengers, receive 30 percent of the grants.

Airports can raise some money on their own through passenger facilities charges, but they are capped at $4.50 per passenger. The limit should be nixed, the Airport Improvement Program ended and the airports of America set up to raise their own money for their own improvements.

For the first time in years, there’s real momentum and energy for reform. An infrastructure initiative is coming, and measures that save the government money should take precedence in what will be a costly endeavor.

It’s time to put the Airport Improvement Program and all needlessly bureaucratic top-down management of the air travel industry to rest and give entrepreneurism and innovation a chance to improve the lot of America’s travelers.